Google has long been a leader in web search – much to the chagrin of some competitors.
In fact, several antitrust advocates have worried about Google’s dominance in the web search market and its potential for monopoly in that field. But now Google is expanding into new areas including wireless and broadband which turns the assumption that it’s a web search monopoly on its head.
Google Expands Into Wireless
Google plans to enter the wireless market in the United States, and compete directly with wireless leaders AT&T and Verizon. In addition, Google is planning to expand its high-speed broadband Internet service to as many as 34 cities in the coming year. Both the wireless service and high speed Internet markets are extremely concentrated, but Google is confident that it will be able to make a dent.
Google’s Project Fi
Google’s wireless – named Project Fi – is still considered to be an experiment. According to Google Spokeswoman Niki Christoff, Project Fi is only available to users of the Motorola Nexus 6 Smartphone by invitation. For $20 per month, subscribers receive basic voice and text service. A gigabyte of cellular data is available for $10 per month. Not only is this pricing attacking wireless competitors’ high profit margins, but Google is also planning to rebate payments to customers for any unused data, which is virtually unheard of in the market.
Google also has high speed Internet companies nervous. Google Fiber has been spreading across the country, and competitors are taking notice. In fact, after it was announced that Austin, Texas would receive the service last December, Time Warner Cable and AT&T announced that they would be offering a higher-speed upgrade to customers in that area.
Although Google’s entry into the wireless and broadband markets is great for consumers, and trouble for competitors, the moves are very strategic for the web search company. The easier it is for mobile users to gain access to the web and home users to connect their computers the web, the more opportunities users have to access Google’s other products.